Thoughts on LLOYDS TSB Shares

Vortigern

redbull5 wrote: »

Surely the bank will recover and shoot up...

That's what I thought when I bought Halifax at £8.34 in September 2007. A columnist somewhere said Halifax shares look cheap.

I'm still hoping they'll recover and shoot up - but I can't see it happening anytime soon.

Thrugelmir

sabretoothtigger wrote: »

They just lost a few billion to PPI but on the plus side they have not paid a div for years, this is accumulated value. In theory the share price is cheaper then it appears, sub 60p its a maybe

A few billion represents the equivalent of one years profits at the peak of the boom.

Around 60% of its mortgage book is considered at risk by analysts if interest rates rise sharply.

LloydsHBOS still has a very large exposure to Eire. So a very large potential risk.




Standard Chartered. Dec 91 Share price 102p
Dec 01 Share price 834p
Today 1617p

:beer:

Reaper

redbull5 wrote: »

Surely the bank will recover and shoot up, or can people see it going down even lower.?

Not necessarily. You seem to be taking the view that because the stock has gone down it must bounce back to its previous level eventually, but that is by no means always true. There can easily be permanent changes that stocks do not bounce back from (or growth that does not fall back). Unless you can think of a reason why it should go back up again you should not invest.

I am staying clear of all bank stocks at the moment. I don't think the problems in Greece are over and if the contagion spreads a worst case scenario would see banks all over Europe going down like dominoes. Hopefully it won't come to that but buying shares in a single bank is too high risk, low return to have much apeal to me.

sabretoothtigger

Thrugelmir wrote: »

A few billion represents the equivalent of one years profits at the peak of the boom.

Around 60% of its mortgage book is considered at risk by analysts if interest rates rise sharply.

LloydsHBOS still has a very large exposure to Eire. So a very large potential risk.




Standard Chartered. Dec 91 Share price 102p
Dec 01 Share price 834p
Today 1617p

:beer:

Yep STAN are good. ZERO business in the uk is probably no coincidence. Another reason why BP is lower risk

Not that cheap?


I think main risk to Lloyds is not their small customers but the risk of finding funds for the bank.
They cant lend what they dont have. Ultimately the mortgages are secured and I think that ratio will outperform expectations

Its one of the main hidden positives and therefore reasons to invest, it wouldnt be cheap if doubts werent so plain and obvious.
Rate risk applies to everything in theory so again its obvious and I think we get inflation, rates have to rise but we are trailing inflation already and thats the grand plan apparently


Ireland is not a populated area, its one of many drags on the company.
Still target price - 100p

Thrugelmir

sabretoothtigger wrote: »

I think main risk to Lloyds is not their small customers but the risk of finding funds for the bank.
They cant lend what they dont have. Ultimately the mortgages are secured and I think that ratio will outperform expectations

Lloyds prior to the takeover of HBOS was in reasonably good health. Unfortunately the board of Lloyds took a punt on HBOS without performing any due diligence. Whilst there are syngergy's from the merger. The can of worms which currently exists is going to take some years to unravel. May be a good recovery punt but not a stock to have any serious weighting in.

The reinstatement of the dividend may be a while away. As the new CEO will take every opportunity to get the bad news out the way this financial year.

opinions4u

Basically, if you don't know anything about a company (e.g. who they "merged" with in the not too distant past, what their actual name is - it's not Lloyds TSB these days) and have no idea about why the share price should rise (other than the fact it seems to be historically low) then you should steer clear.

My guess is that the share price will be higher in 2-4 years than it is now. But the Eurozone debt problems still have the potential to damage LBG in Ireland and don't forget over half their UK mortgage customers have a variable rate loan that will rise when base rates do.

moneylover

Thrugelmir wrote: »

No Lloyds did not merge with HSBC. In fact I wish they had.

Suggest you invest in a subscription to Investors Chronicle.

Spend a few months reading and learning.

I like the InvestorChronicle. We have it in our local library and I read the daily free bulletin. What do people think of the charged newsletter which is £115 a year? Do many of you subscribe?
https://members.investorschronicle.co.uk/ftb/purchase/selectOffer.do?promoCode=icla4b

Thrugelmir

moneylover wrote: »

I like the InvestorChronicle. We have it in our local library and I read the daily free bulletin. What do people think of the charged newsletter which is £115 a year? Do many of you subscribe?
https://members.investorschronicle.co.uk/ftb/purchase/selectOffer.do?promoCode=icla4b

Used to subscribe. Now much of the information is available on line. So I have a read the articles in Tesco's while the other half does the shopping.